Theranos Founder Elizabeth Holmes’ Sentencing Delayed as Judge Sets Evidentiary Hearing on ‘Limited but Serious’ Issues

The sentencing of Theranos founder Elizabeth Holmes has been delayed as a judge further explores a new trial request based on a prosecution witness’ mysterious visit to the convicted fraudster’s home in August.

“The issues raised by the defense are serious. Limited but serious, let me put it that way,” U.S. District Judge Edward J. Davila said in a status conference held on Zoom Monday.

Davila ordered a “limited” evidentiary hearing to take place on Oct. 17 in his courtroom in the Northern District of California’s San Jose courthouse. Holmes’ sentencing had been scheduled then but will be moved to a date yet to be determined.

The star witness will be Adam Rosendorff, the former Theranos lab director who spoke with Holmes’ partner, William Evans, during a surprise encounter in the couple’s driveway on Aug. 8. Rosendorff said he stands by his testimony “in every respect” in a sworn declaration prosecutors filed with their opposition to Holmes’ new trial motion.

But Davila, who presided over Holmes’ trial and the trial of former Theranos Chief Operating Officer Ramesh “Sunny” Balwani, agreed with Holmes’ attorneys that Rosendorff’s declaration doesn’t resolve the possible issues raised by his decision to try to contact Holmes eight months after she was convicted and the possibility. The judge emphasized, though, that attorneys can’t try to rehash the extensive examinations Rosendroff endured over six days of trial testimony.

The only relevant question for Rosendorff is, “Were you manipulated by the government?” Davila said. “His critique of the trial” is irrelevant to whether Holmes’ deserves a new one, Davila added.

The motion that publicly revealed Rosendorff’s visit is one of three Holmes’ attorneys filed Sept. 6 seeking a new trial in the federal fraud case stemming from lies prosecutors say she told investors about the viability of the science behind Theranos, a startup blood-testing company that attracted big-name and big-dollar backers.

The other two motions concern arguments prosecutors made in Balwani’s trial, as well as emails prosecutors produced after Holmes was convicted that described failed attempts to access a database her lawyers believe could have been used as evidence in her defense.

But Davila said Monday he has all he needs to decide the latter two motions. It’s the situation involving Rosendorff that appears to be more of a legal stumper, with the judge calling it an “issue of first impression,” which is judicial speak for an issue that has never before been addressed in a legal ruling.

Rosendorff stood by his trial testimony in his declaration and said he has no reason to believe prosecutors “misrepresented or otherwise created a misimpression about Ms. Holmes’ or Mr. Balwani’s conduct at Theranos.”

But he also didn’t specifically address his Aug. 8 visit, nor did he address Evans’ declaration that Rosendorff said he “felt like he had done something wrong” and that prosecutors “made things sound worse than they were.” And the judge doesn’t have previous cases to look to for guidance on how to handle this.

“I will say I haven’t seen a case where this has happened before,” said Davila, who was a Santa Clara County Superior Court judge for 10 years before then-President Barack Obama appointed him to the federal bench in 2011.

Holmes’ lawyer Lance Wade agreed the situation “is pretty extraordinary, your honor.”

“At a minimum, we should address this and not leave uncertainty given the significance of Dr. Rosedorff’s testimony,” Wade said.

Rosendorff’s declaration, which doesn’t acknowledge the visit, is “very carefully crafted” and creates “a strong inference” that he believes prosecutors misled jurors. As of now, we don’t know why Rosendorff felt “compelled to get into his car and drive to Ms. Holmes’ residence,” Wade said.

“We’re speculating as to his motive on that,” said Wade, a partner at Williams & Connolly LLP.

Assistant U.S. Attorney John Bostic said Rosendorff’s lack of acknowledgement of the visit should not be taken to mean that Holmes’ partner’s account of what happened is correct. Bostic says not mentioning it in the declaration may have been a “deliberate decision to avoid creating what would be an unnecessary factual dispute.”

“It actually doesn’t matter exactly what Rosendorff said, the words that he used” because his declaration rules out any possibility that a new trial is warranted, Bostic said.

“Dr. Rosedorff’s declaration makes clear that he is not recanting any of his testimony,” Bostic said.

Rosendorff’s motive for visiting Holmes’ home is irrelevant to the legal issue of whether she deserved a new trial, but still, “I don’t think we need to speculate.”

“The declaration talks about the compassion that he feels” for Holmes and Sunny Balwani and their families,” Bostic said. “I think that’s understandable.”

“I don’t think we need to speculate. The declaration talks about the compassion that he feels” for Holmes, Balwani and their families.

“I think that’s understandable,” Bostic said. “The fact that people have been convicted of federal felonies, I think that is a weight felt by many participants in the federal justice system.”

Davila noted early in the hearing that Wade and his team aren’t accusing prosecutors of misconduct, which Bostic said is a crucial point.

“I’ll tell the court now there was no such misconduct so no such evidence will be found,” Bostic said.

Davila said the hearing won’t be longer than a day, and he doesn’t believe it will take a full day, either.

“The issues are limited to his declaration and, as Mr. Wade said, ‘What did you mean?'” the judge said. Bostic believes Rosendorff’s declaration affirms that he did, “and so perhaps this will be an opportunity to either reaffirm that or to explain why he parts company with that.”

“I don’t believe this will be a lengthy, length process,” the judge said.

Read Holmes’ lawyers reply to prosecutors’ opposition to their new trial motion, below:

(Image: Holmes photo by Justin Sullivan/Getty Images; Rosendorff image a screenshot from Fox affiliate KTVU 2 in San Jose)